#8 - Simon Sinek: Competition, Business and the Infinite Mindset

27:32If there was a balance of power, it just couldn't have happened, it wouldn't have been able to do that. And what always happens in an infinite game is new competitors, new rivals, new players will emerge. And if you consider the way the Cold War existed, right? Cold War 1.0 existed on three levels. There was existential, the two largest nuclear powers on the planet capable of completely destroying the earth multiple times over, the United States and the Soviet Union. There was a philosophical competition, right? American democracy and capitalism versus Soviet-style communism. And all of our alliances were always on philosophical lines.

28:12If you were communist, we weren't friends with you. It was that easy. And the third one was economic. Two largest economies in the world were the United States and the Soviet Union. Not coincidentally, those things overlap with life, liberty, and the pursuit of happiness. And if you go back and look at the founding document of the Soviet Union, it'll talk about economic strength, military strength, and advancement of the philosophy of communism. In other words, it seems that for a people to be motivated to strive and sacrifice for the greater good, it seems like you have to have this trifecta of something life, something philosophical, and something economic.

28:50Would you say that the Soviet three things would qualify? Because in your book you mention the founding fathers, their core principles are very infinite-minded. Yeah, yeah, yeah. No, no, for sure. The same with the Soviet? Absolutely the Soviets were infinite-minded. And it's best exemplified by the fact that they had a system for peaceful transfer of power. It wasn't a dictatorship. There were multiple secretaries general of the Soviet Union, and they had a system for peaceful transfer of power. Granted, their secretaries general stayed in power for 20 years, but the point is when they weren't trying to install their children or their families, it went from Lenin to Stalin to, I can't even remember all of them, Andropov was in there Chernenko, Gorbachev I actually think that was the list I couldn't possibly know or correct I might have got Andropov and Chernenko backwards Chernenko didn't last very long, he was super quick Yeah, I think it was Andropov, Chernenko Anyway, it doesn't matter, someone will correct this Oh for sure, someone in the comments is going to have it Anyway, the point is that they had a system for peaceful transfer of power which is important, as do monarchies Monarchies have a system for peaceful transfer of power as well, right?

30:03Sometimes it gets a little complicated. So those systems, dictatorships are finite. And this is why benevolent dictatorships are actually the best form of government, right? Super efficient, it's all benevolent. The problem with benevolent dictatorships is succession. They usually last but one person. You know? There's like one and then you're like, oh. Has there been a real example of a benevolent dictator that you would say was net good? More than a democratic process? Singapore. Yeah, I guess. Singapore is not really a democracy and it works really well. Do you think that's just a function of its size?

30:39I mean, that's a different conversation, whether the net-linked dictatorships can operate at scale. And size is relative. Relative to what? If this was 300 years ago, Singapore would be freaking huge. And so if you look at what happened to America, we imposed our will on the world for about 11 years and then new players started to emerge that filled those three things. And those three things were all conveniently co-located in the Soviet Union, so they were enemy number one, public enemy number one. Super easy for us, tangibly. So those three things were replaced. So the nuclear weapon tension was replaced by North Korea, maybe Iran, right?

31:16The philosophical tension, Soviet-style communism, was replaced for many years by religious extremism. It was a philosophy looking for customers, right? And then the economic tension was largely replaced by China. and even though China is filling more and more of this and some would argue that Russia was trying to get into all of them and at least as of now we don't fear nuclear war with China it's not something we fear we're not hiding in our desks for fear of being bombed by China like we feared nuclear war with the Soviets but the point is that those three tensions that still exist and they're alive and well, the Cold War is alive and well it's just a different form of it and the problem is now the existential threat has been diffused because it's across multiple poles multiple nations and so for the rest of the world they see public threat number one as us because all three of those tensions exist in the United States but we are so freaking blind and don't realize that there are very real existential threats outside our own borders that we're so preoccupied with ourselves and it goes back to we look for enemies so when the Soviet Union went away then how do you know what you stand for if you can't see who's standing in your way?

32:28And when you no longer perceive an external existential threat you start looking internally. And this is why we're so divided as a nation is because we had the wrong mindset when the Soviet Union collapsed. And by the way, this has been repeated throughout history this is what happened to the Romans as well. When the Romans' external existential threat which is Carthage was flattened they started looking internally and the Roman Empire went into a steep decline due to infighting I'm very uncomfortable with the fact that you have to have an enemy but I can't find a case that demonstrates our ability to come together and sacrifice willingly to advance a greater good without a tangible representation of someone standing in our way and pretty much the only thing in the world that gets people to come together and sacrifice for a long period of time and en masse is war.

33:28And I find that very upsetting. Well, this is why I'm yabbering on in almost every piece of content I make about this concept of this Moloch creature, right? Because to me, that is the personification, manifestation of these nebulous forces of misaligned incentives that create war, that create dispute, rivalry, in unhealthy ways.

33:57And, you know, we've talked about this many times at length, about what's the best way of framing these forces. But I think it is important to give it a face and a name. Yeah, yeah, make it tangible. Make it tangible. It's like we're tangible-driven animals. Yeah. Like, we need to see the thing, right? Now, I will say, if you go back to the Cold War 1.0, it was, there was mutually assured destruction, right? So it was actually stable. So we have to distinguish between an enemy in the infinite realm versus an enemy in the finite realm. Because I would argue that in the finite realm, it's unstable, which is why it leads to war.

34:37And in the infinite realm, it's actually quite stable because we try to avoid the war. We don't want to go to war, right? But there is definitely a tension that is managed. And I think that's a better way to think of how competition exists in an infinite game, which is it's a managed tension rather than a desire to beat. Right, it's a sort of voluntary tension. It's a voluntary tension. It has this layer of consciousness to it. And a necessary tension. Yes. Because it's much easier to know what you stand for when you can see what you stand against. So how would we, you know, again, if Moloch is this personification of...

35:13Moloch is forcing us to maintain the Moloch trap. Yes. the Moloch trap is playing in the infinite game with the finite mindset the Moloch trap for me is playing to win in a game that has no finish line trying to outdo, beat, destroy someone that they may go bankrupt but the game isn't over what's an example? of a company in the Moloch trap? well I think it's most companies it's the way most companies do business they're so obsessed with beating their competition that they can actually do things to harm themselves So like optimizing for a short-term metric? An obsession with efficiency? I remember talking to a CFO of a very significant company once, and significant I mean by size.

36:00And I said, what are your priorities? He said, innovation and efficiency. And I said, good luck with that. Innovation is inherently wasteful. Go ask 3M, go ask some of the most innovative companies in the world. They're diametrically opposed almost. There is experimentation which is inherently wasteful. And so when a company is obsessed with margin and cost and efficiency, you literally are engineering out innovation. Because you're not allowing a space for people to try and fail. Or allow a space for people to say something that's completely badass stupid. And for somebody to go, wait, hold on, there's something in there.

36:38Everybody's going to take the safe road or ignore the big risks that they could try and take. Nothing wrong with a focus on efficiency, as long as it's not efficiency at any cost. And this was the big mistake that Americans made when we brought the Toyota Way to the United States. The Harvard professors that went to Japan and studied Toyota and thought, oh my God, this Toyota Way is so incredible. Look what Toyota is the most incredible company in the world. How do we bring this to America? And we called it Lean. and you're like guys it was never about efficiency it was about constant improvement and the whole point of the Toyota Way was to allow the front line to make micro micro corrections and suggestions to the process that over the course of time become monumentally large whereas when we do lean we send in a bunch of consultants to evaluate the factory and almost leave out the front line, who know more about what's going on than anybody else.

37:39So Americans screwed it up, and we screwed up the Toyota way when we brought it domestic. And the number of companies that will say that lean did more damage to their companies because they became obsessed with efficiency. I think another Moloch trap, I fell into the Moloch trap, being obsessed with beating my arch rival, when there was no real game at play. There was no game. The game was a complete artificial narrative in my head. That, I think, is a part of the Moloch trap, which is perceiving a game to be one where there is actually no game. Not only is there no competition, there's actually no game.

38:14So it's like this idea of false zero-sumness. False zero-sumness, right. Seeing a fixed pie when there isn't one. And remember, there's no fixed rules, there's no agreed-upon objectives, and there's no agreed-upon timeframes. So I'm literally inventing a game that doesn't exist. And my sense of winning or losing depends on where I'm looking. It's all my emotions. No actual game at play. That's a Moloch trap. We've all been in this situation where we hear that somebody we work with gets a promotion and we get angry. We got angry at somebody else's career success. What nerve is that pushing against?

38:55Well, they don't deserve it. they didn't earn it. I'm smarter. I'm like, whatever narrative, that's an emotional reaction to somebody else's success. What are you worried about their career for? Why don't you worry about your own? That's a Moloch trap. Obsessive focus on what other people are doing over what you're doing. Again, it's over-optimizing for one narrow metric. And something happened when COVID hit that I found magical and reinforced all of the things that you and I are trying to share with people. which is when we went into lockdown and COVID happened, not a single company was obsessing about what their competition was doing.

39:36100 % of companies were obsessing with how to stay alive. Survival. That was the only thing. You literally didn't care what the marketing plan, what the new product was. No one cared what their competition was doing. Overnight, we just stopped caring about the competitors and were obsessed with survival of ourselves. And that is the correct mindset in harsh times and good times. So it's almost like this excessively competitive mindset is a luxury belief. Correct. And so if you look at any time war strikes, or more importantly, when there's an existential threat, the stupid stuff falls away. September 11th, all the stupid stuff just fell away.

40:18We actually became much more focused on important stuff. World War II, the Blitz. I mean, people were way more focused on what was actually important and actually helped move the needle for survival. And look at the quality of innovation. The number of things that were invented in World War II is like radar, the microwave. I mean, I only know a short list. I mean, it's just this huge long list of innovation that happened in the 40s and then perfected in the 50s for some of them. is astonishing because we weren't worried about stupid stuff. We had to solve problems and we had to solve them quickly.

40:57We built the Pentagon. We built the whole Pentagon in something like four years or maybe even less. And it came in on time and on budget. I think it was actually less than four years. We'd have to look it up. If you had to build the Pentagon today, like 20 years later, they'd still be putting the finishing touches on it. We saw it happen in the 80s. We had the hole in the ozone and it became really critical and we were afraid of the hole in the ozone. And we fixed it. That's actually one of the best examples of us getting out of a moloch trap. We full on fixed it. It was a deep coordination problem.

41:25There were massive incentives for everyone to defect. But remember, fear came with it. And the scientists, don't let scientists and engineers do marketing. And the scientists have been like, this is the worst thing that has ever happened to humanity, and we're going to see the results, I think, maybe, I can't tell you exactly, in about 50 years. it's so bad like made no one afraid right that's like telling a 21 year old you know when you retire when you're 60 you're not going to have any money in the bank you should probably start saving now see how well that goes human beings just aren't that smart and we're not that good at imagination and forward planning and that goes back I love all the repeating patterns that we've had in here the repeating themes imagination is not enough tangibility has to be enough Tangibility is what we can point to.

42:20And even though I know there's confusion between weather and climate, some of the extreme weather at least is making tangible. And that is screwing with people's lives and livelihoods. And it's making difficult, life difficult. At least that's a detail we can point to, saying, see, we have to stop that. And the point is, the pressure of existential threat is kind of amazing. Now, we couldn't operate under those conditions all the time. Right, because the trouble is that it then cannibalizes. Well, A, become numb to it, but it also cannibalizes a bunch of resources into World War II. Yes, it created a bunch of brand new, amazing technologies.

42:57It also created a bunch of really shitty ones. You got the nuclear bomb out of it, among other things. I mean, the application is awful. The science is incredible. Yes. It's almost just like we need a reality check every now and then. That's the value of an existential threat. I think so. It's like if aliens suddenly showed up, Independence Day style, hovering over every city. You'd like to think that we would stop bickering over gender disagreements or whatever. The culture war stuff would fade away temporarily. We saw it. I mean, part of Osama bin Laden's plan on September 11th is that he would attack us and he would divide our nation.

43:32And the total opposite happened. Which is no matter how much people hated George Bush, everyone rallied around the president. We became a very unified nation because the external threat was vastly greater than any internal threat in daily politics. Do you think that's even possible today? I was just wondering, is there anything that could come along now to make people stop fighting on Twitter for a little while? The thing that I find upsetting is our incredible ability to politicize everything. And my hope was that COVID was going to be that thing. If anything, it made it worse. If anything, it made it worse.

44:11And you have to consider the precariousness of a nation when both sides of a political system are accusing the other side of being traitors or unpatriotic or un-American. When the reality of a political system is simply we agree on the cause, life of liberty and the pursuit of happiness. We agree in the structure, the constitution. We disagree about how best to implement and advance it. And that should be a political debate. And it should go in and out of fashion. Like sometimes one theory suits the times and the economic times better, and the culture and the politics and the technology of the day.

44:53And that pendulum should have a healthy swing. But when both sides accuse the other of destruction, when both sides believe they're on the side of construction,

45:08it's bad. Is there any low-hanging fruit that you think, okay, if you could click your fingers and do tomorrow to try and fix this, the US is essentially its ideological civil war that it's got going on. Is there anything that you think should be happening right now? So an existential threat certainly is a jolt, but the reality of anyone threatening that homeland is pretty small. and wars in foreign lands, they don't threaten us in the way that World War II threatened us and the way Hitler threatened us. I think Europe is coming together in a magical way because Russia, Ukraine is on their doorstep.

45:54And so the bickering of Europe seems to have subdued some and one of the unintended byproducts, again, miscalculation, understanding finite and infinite games, which is Putin thought that he would fracture NATO and Europe and the opposite has happened. Right, definitely. He's done a very good job of strengthening it because he represented an existential threat to all of them. And so all of their stupid bickering and silliness, as we've been discussing, just instantly vanishes. Yeah, the trouble is I don't think we can, you know, we can't hope, war can't be the answer. No, no, no. I know you're not saying that.

46:38And I do believe that war happens when we fall into a Moloch trap. I think you're right about that, which is war happens when one party, it doesn't require both, but one party falls into the Moloch trap. Because if you can stay out of the Moloch trap, then you manage attention. The discomfort that I have is there has to be an enemy. And that makes me really uncomfortable. Which is Moloch. Well, Moloch is a story. Moloch is a metaphor. And so even in my work, when I talk about my work and I'm super in the clouds and I imagine a world in which the vast majority of people wake up every single morning inspired, feel safe wherever they are, and end the day fulfilled by the work that they do.

47:23And I talk about the world and business and these ideological terms, you know, infinite, infinite, infinite, infinite and beautiful, lovely, mushy, mushy, mushy. But I'm also fully aware that I say things like I want to undo everything Jack Welch did. Jack Welch is my, he is my Moloch. He is standing in the way of my vision. He is, he is, he is forcing people to play his game as opposed to playing the ideological right game that's good for all and win-win. and Moloch is forcing people to play win-lose. Jack Welch is forcing to play, you know. And then I have modern ones. Tell us who Jack Welch is.

48:00Jack Welch was the CEO of General Electric in the 80s and 90s, and he became the poster child for a new way of interpreting capitalism. Things that we consider normal in business today are actually very modern constructions. So, for example, the obsession with quarterly results like that, that's relatively new. Jack Welch helped popularize that. The use of equity, the stock price, to incentivize professional executives didn't exist. Right, that was like a Milton Friedman thing, right? Yeah, so Milton Friedman in the late 1970s, he wrote it multiple places, but it was really this one op-ed that he wrote in the New York Times where he basically offered a new definition of business, sort of counter to Adam Smith, who was sort of the grandfather of modern capitalism.

48:51And just as an aside, it's Adam Smith's version of capitalism that Thomas Jefferson was obsessed with and had read all the volumes of Wealth of Nations. And it was Adam Smith's version of capitalism that made America great and made America what it is today. But then in the 1970s, Milton Friedman theorized that the purpose of business, the purpose of business, right, is to maximize profit within the bounds of the law. He never talked about ethics or advancing a cause or looking after people, just to maximize profit. One single metric. There you go, that's it. Distilling the whole richness and complexity of all forms of business down to one single thing.

49:31And then you hear this nonsense, but I have a fiduciary duty to maximize profit. I'm like, no, that's one of them. And so what happened was, a class of executive at the time who embraced Friedman and used Friedman's thinking to change the way in which we articulated not articulated, interpreted capitalism. And so, I'm a diehard capitalist. I do not like this version of capitalism that we're living in now. Is this like what late stage capitalism is? It's very, very short termist. Right? We even talked about before that long term plans like we think five years is long term and even those don't happen.

50:09Right? The obsession with quarterly results, the obsession with finite, I believe that capitalism as a philosophy fell into the Moloch trap. And the concept of using mass layoffs to balance the books, where we used people's livelihoods on an annualized basis so that we can meet an arbitrary projection. Think about that for a second. We're profitable, just not as profitable as we promised Wall Street, so you have to lose your job. That, as a strategy, did not exist in the United States prior to the 1980s. It wasn't the thing. Layoffs were used really existentially. Our company is dying and we have to take drastic measures.

50:45But as an annual tactic to meet projections, literally didn't exist. That is a Moloch trap. Pitting executives against each other is a Moloch trap, which is now normalized. We now live in a system where an executive goes on television and if they announce that we're having layoffs, the stock price goes up, and if they announce that we're investing in R &D, the stock price goes down. You think about the infiniteness of companies and business and what it takes to survive for the long term, that's the opposite. Layoffs destroy cultures and R &D ensures that you're going to reinvent yourselves for the future.

51:27So Jack Welch, really what he did at GE and the engineering at GE became the poster child for this new modern form of capitalism, this Milton Friedman form of capitalism. and Jack Welch, I mean, in the short term when GE was the hero, well, GE is a shadow of its former self and may not even survive, at least not in its current form. It might be chopped off and sold off as spare parts because it wasn't built to survive. It wasn't built to last. It was built for short-term gains that enriched the lives of a few. And the depressing part is, we talk about private companies are better than public companies because you don't have the public pressures, blah, blah, blah.

52:04But if you look at the number of companies that are now VC or PE backed, it's something like 80%. I mean, it's a disgustingly high number. Right, and they're also playing a finite game because VC fund or private equity fund only makes money when they sell. Correct. So they're always incentivized to do the short-term thing. So their business model, and I've heard so many horror stories, and let's not say all VCs and PEs are horrible, but it seems like it's a disproportionately high number who, no matter what they say at the beginning of the relationship, give it a few years and the pressure they start exerting on the CEOs and the companies to make decisions that benefit their business model, not the company's business model.

52:41In other words, being a private company with heavy VC or PE backing, you're going to face the same pressures that any public CEO faces from Wall Street, which is they're going to force you. Think about that. A public company is going to make decisions about their company to help a 27-year-old analyst get their bonus. That's basically what's happening. And the same thing's happening in private companies now. And so you asked before, what's it going to take short of a true existential crisis? And the answer is it took us 20 or 30 years, slow boiling frog to get to where we are today. It's going to take 20, 30 years to undo it.

53:19And what it requires is better leadership. And leaders who have a different definition of the purpose of business, and I would argue the purpose of business is to advance a cause, protect people, and maximize profit. in that order. Advance a cause, protect people, make profit. Right? In that order. So profit, of course, has to be there. Right? But there's other things as well. And there's other things that sometimes are more important because when you make an ethical decision, an ethical decision is the choice to prioritize cause and people over money. Most unethical decisions that are made in business are prioritizing money over cause or people.

53:58That's roughly the triple bottom line, right? What model? What you just described? I mean, the way that most people do triple bottom line is I think they do environment, people, and P &L. But it's an attempt to, again, try and broaden the number of metrics that you're optimizing for and also reorder them. What's very important is the order. Right. Because, for example, I've never met a CEO who doesn't believe their people are important. They all think they're important. The question is where on the list. Number one, priority growth. Number two, shareholder value. Number three, our customer. Number four, our people.

54:32See, we care about our people, they're there on the list. Wrong order, right? Trade-offs exist, yeah. And the reason the order matters is because it's a hierarchy, right? And what it says is, when push comes to shove, I'm going to prioritize this over that. Isn't a company that, let's say, the CEO and the executives, they all understand this, they want to switch more to changing the order of priority. how do they not they're going to essentially take a short term hit for long term gain but isn't the danger that during that short term hit they get fired well either they get fired but yeah basically again the moloch trap situation arises where we want to do the more ethical thing but we can't because a guy down the road that's different that's a different thing that's ethical fading so there's a concept in psychology called ethical fading which i find uniquely fascinating which is um when good people are able to do highly unethical things believing that they are still within their own ethical framework and there are multiple things that contribute to the existence of ethical fading and one of those is euphemisms.

55:53It goes back before to the worthy rivals, which is it's much easier for me to direct my feelings of insecurity against someone else. So it's much easier for me to change the language of the things that I talk about so I don't have to feel like I'm taking responsibility. So for example, we constantly are talking about externalities but we rarely talk about the damage we're doing to the people and environments in which we have our factories and offices. We don't speak in plain language. Because the word externalities is something that can be managed on a piece of paper but we're not talking about the actual impact.

56:27The United States would never ever torture us against our values but enhanced interrogation is very interesting. No company would ever, ever spy on its customers but data mining, yeah that's a very important modern business technique. So we use language to separate our decisions and actions from the impact of those decisions and actions. That's one of the things that starts to lean you into ethical fading, as opposed to just having plain conversations in plain language. Another one is our ability to rationalize. Everyone's doing it. I have no choice. If I don't do it, my competitors will do it.

57:07It's what my boss wants me to do. It's what I have to do to get ahead. I've got to put food on the table. Don't hate the players, hate the game. Don't hate the players, hate the game. My personal favorite, it's the system, which is a variation on the theme. And again, what we're doing is we're able to disconnect ourselves from the impact of the things that are happening. Just following orders. That was a famous one, the Nuremberg defense. Just following orders. Not my fault, not my fault. Not my fault, just following orders. And so if you have enough of these things that happen, eventually you have full-blown ethical fading where you can have an entire culture inside a company capable of doing highly unethical things and there are no checks and balances left until there's a scandal or law, government intervenes.

57:51The amazing thing is when these things happen, when these scandals blow up, we drag the executives in front of Congress for testimony and they almost all say the same thing. We broke no laws. Take, for example, a drug company that might own a patent on an essential drug and this happened with the EpiPen, the company that owned the patent on the EpiPen, which had like a 90-something percent market share. I mean, you're the only game in town. And by the way, you have to throw it away every year. It only has a shelf life of one year. So even if you don't use it, you've got to buy a new one. Great business model.

58:31Literally, because the board is like, you need to hit these numbers, and the company's like, all right, we've got to hit those numbers, what they started doing is jacking up the price. 300%, 500%, 600%, 800%. They raised it like 1 ,500 % or something ridiculous within a very short period of time, within like two years. Now there are people who need an EpiPen to survive. They can no longer afford the EpiPen. And these guys are celebrating because they're hitting their numbers. Now there's nothing illegal about what they did. And when they're dragged in front of Congress, and I believe the CEO at the time, her dad, was a congressman.

59:01Aside. But anyway, when they dragged them in front of Congress to testify, they all say the same thing. We broke no laws. We worked the highest standards of the law. Yeah, but what about ethics? That is clearly unethical. And good companies that prioritize cause, people, and then profit would never make those decisions. That's where Miltonian, Jack Welchian capitalism goes completely haywire, which is we literally make decisions that will destroy our own companies and our own economy. in 2008. That was all Mollectrap produced. Dot-com bubble. All Mollectrap produced. And it looks like we're trending back into it again.

59:44Yeah, of course. The dismantling of Glass-Steagall. All Mollectrap produced. Glass-Steagall was the act that was passed shortly after the Great Depression to prevent another great stock market crash from happening ever again. And it ran until the 70s, right? They started to dismantle it. It still exists in some shadowy form, but it's largely been dismantled during the 80s and 90s. Which, by the way, during Republican and Democrat administrations, so don't point to each other. You both did it. Do you know the total number of significant stock market crashes we had between Glass-Steagall and the dismantling of it?

1:00:13Nope. The answer is zero. We had zero. Do you know how many we've had since the dismantling? We had three. We had Black Monday, we had.com, and we had 2008. All Moloch traps because we removed all the checks and balances. One of the checks and balances, for example, is that a bank couldn't be a retail bank and an investment bank in the same organization. That was illegal after Glass-Steagall. It seems pretty basic. It curbed speculation and all kinds of things. Anyway, the point is, you're absolutely right. This Moloch trap is unfortunately, the Moloch trap, our form, modern American capitalism and the executives that are overseeing it, unfortunately the majority of them, are all sitting in a deep pit of malik trap.

1:01:08Like if the malik trap was like a big hole in the ground with some leaves over the top, they all fell in. And so you asked me what is it going to take to get out of it? It's going to take some really forward-thinking, really courageous young leaders. And I say young because I think some of the older leaders, even though they know that the system is broken, they're either too far deep or their incentive structures are so misaligned that they would have to completely destroy their careers and some of them do have that courage, don't get me wrong but a new breed of young entrepreneur who are building companies from the ground up and the Brian Cheskis of Airbnb the guys over at Sweetgreen Yves Chenault, what he built, he's older but what he built at Patagonia These companies are talking differently, they're sounding differently than Jack Welch.

1:02:00And like I said, they're experimenting with infinite-mindedness. They're experimenting with cause and people before profit. So I can imagine the pushback some people are probably feeling, hearing this. Because I know it, I went through this phase myself, particularly during COVID, that it felt like it became the thing for companies to start signaling about how ethical they are. essentially virtue signaling. And I use that term in the more disparaging way. It's like empty. They're latching onto, oh no, this is the current thing and look how conscious we are. And how do we, I guess, discern between the companies that are truly, authentically having this excellent cause in mind from the outset and it's an infinite cause versus the ones that are jumping on the bandwagon of signaling virtue.

1:02:54So what we call virtual signaling, the technical term for virtue signaling is marketing. You know? And like the number of companies that have a purpose statement on their website, but if you go look at the decisions that they make, it seems like they've never read that purpose statement. You know? Because clearly they're not following it. You know? They're not following the cause that they seem to have laid out. And unfortunately, whether we like it or not, that is the only way to find out, which is to compare the decisions they make. Think of it like in a personal relationship. Your partner can say anything they want to you about how good they are and how they mean well.

1:03:30Well, I believe you, I'll give you the benefit of the doubt, but then I'm going to watch. And I don't expect you to get it all right, but if I can see you're really trying to get it right, okay, I think this is for real. But if I see that you've really never even paid any attention and you just said those things to get me off your back, it was marketing. It was just selling. And this is why I think B Corp and organizations like B Corp who have very, very strict rules and they will rate a company that they are, it helps us make decisions because the average person neither has the resources, time, or quite frankly, desire to go do a deep dive research on a company, what they say and what they do.

1:04:21And so we do need third party to help us. And even that gets tricky because who's an authoritative and ethical and legitimate third party? Because many, many companies say, endorsed by this organization that they fund. But B Corp, I think, is one of those that when you see a B Corp sign, you can take comfort that that's a company that's really trying to do the right thing and is already operating at higher standards than most. So bring it back down to a more personal level for people watching. You wrote a book called, first of all, you wrote Start With Why, and then you wrote Finding Your Why.

1:04:59How do we go about finding our why? Is it possible to take the viewers through the exercise? The simple answer is yes. I mean, there are many, many ways to do it, and it really boils down to personal preference. I got so many complaints after I wrote Start With Why, like, got it, how do I do it? so eight years later i wrote find your why i mean you know better late than never um so find your why is a workbook that people can buy on amazon and go through the process of finding your why you can do that on our website we have all kinds of resources self-guided or we can guide you to find your why that's another resource that we make available but i can tell you another fun way which is totally free called the friends exercise find a friend a very like a best friend who you love and they love you, they'd be there at 3 o 'clock in the morning for you.

1:05:45If you needed them, you'd be there for them at 3 o 'clock in the morning if they needed you. Do not do this with a spouse. Do not do this with a member of your family, a sibling. Those relationships are too close. Do it with a best friend. And ask them this very simple question. Why are we friends? And they're going to look at you like you're nuts. Because the part of the brain that controls our feelings, like friendship and trust and loyalty, the limbic brain, doesn't control language, which is our neocortex. And so this is why we struggle to put our feelings into words. It's why we use metaphors and analogies all the time, because we struggle to put our feelings into words, right?

1:06:21It's like this. It's like, I feel like I'm on a train that's heading towards the end of the track. It's like, got it. So you ask this question, and they're going to look at you like you're crazy because they don't have the words to describe why they love you. So you actually stop asking the question, why? And you say, come on, come on. What specifically is it about me that I know that you'd be there for me no matter what? Because when you ask the question why, you get an emotional response. So now we want them to engage their rational brains. We ask the question what? What specifically is it about me that I know you'd be there for me no matter what?

1:06:51And they're going to hem and haw and they're going to struggle and they're going to start describing you. I don't know, you're smart. I trust you, you're loyal, you're always there for me. And you have to play devil's advocate. Great, that's the definition of a friend. You have that with many people. What specifically is it about me that I know you'd be there for me no matter what. And again, they're going to hem and haw. Don't help them. Don't let anybody else help them. It's a torturous experience, but you have to go through it. And eventually they'll give up. Eventually they'll give up and say, I don't know.

1:07:22All I know is, and they'll start describing themselves. All I know is, and this is what my friend said to me. All I know is, Simon, I can sit in a room with you. I don't even have to talk to you when I feel inspired. And I got goosebumps. In fact, I'm getting them right now, right? Every time I tell a story, I get the goosebumps. Because basically what they did is they articulated the value you have in their life. And you had the emotional response. So you either got goosebumps or you well up with tears or something touches you because it mattered so much to you. And if you do this with multiple friends, they will say very similar, if not the exact same thing.

1:07:59Because your why is the thing you put out and give to the world. And it's the reason people love you and value you. So the space that you fill in people's lives is the thing that you give them, is your why. So it will definitely get you in the right ballpark. You may not get the exact words, but you'll definitely get something that's useful and actionable. And it's just generally a fun process. We did this exercise a few days ago. We recorded your podcast and I ended up crying. Which has never happened before. Right, but this is the power of the why. You're going deep into the part of the brain.

1:08:30Because it's hard to actually find. It's like, I just want the world to keep existing and things to be good and people have a nice time. And it's just so deeply personal, but it's touching on a truth. Your why is the preservation of relationships. And the word preserve is probably too passive for you. But it's sort of like the fierce protection. And you can see all of your work. The times where you've sort of talked about yourself falling in a mullet trap was not a good time in your life. You talk about how it became insidious and self-destructive. You talk about when you talk privately about your family you become deeply protective of relationships.

1:09:09When you talk about the things that you love in your career or the great memories in your life, it's when people came together in great joy to solve problems. And for you, there's this beautiful relationship theme that exists throughout. And ultimately what win-win is, is the preservation of a relationship. That's all it is. We hope to do business together. and so if I negotiate with the intention that you feel like you're winning and you negotiate with the intention that I feel like I'm winning not only will we both get everything we want but my goodness what a great way to start a business relationship and your

1:09:48hope is that that should be the standard mode of operating for personal relationships business relationships and that's what you call win-win and the Moloch trap is the thing that is preventing those things from happening.

1:10:05Tangent. Different topic. My favorite kind.

1:10:12We've been at a number of conferences actually over the last year. Weirdly. Like all of them. Yeah, and every time I see you speak, every single time, you just blow me away. You are truly one of the best speakers, I think, alive. Thank you. How the hell do you do it? What's your secret ingredient? Your process? As someone who's trying to become a better speaker, I'm sitting there watching your stuff and I'm trying to imbibe and ingest it. And I bet there's a lot of people out there who also are trying to, most people have fear of public speaking and want to be the best speaker they can be. So give us your wisdom.

1:10:51Yeah, sure.

1:10:55So there's a few things. One is, I don't really want to be a public speaker. And so I don't have the need at an emotional level to be liked in that space because it's not my chosen profession. What I have is a deep-seated drive to spread a message that I desperately believe in. And it just so happens that speaking publicly is a good way to do it. And so when I have people come up to me and say, oh, I really want to be a public speaker, can you give me some advice how I can have that as a career? And I go, sure, absolutely, happy to help. What do you want to speak about? They go, I don't know yet.

1:11:43And I'm like, no, no, no, no, no, you're missing it. You have to have something that you have desperate belief in. Then you figure out the way to do it, and speaking is maybe a good way. but you can't think I want to be a speaker and have nothing to speak about that's when you care too much about what people think about you because that's now your career for me that was just a path a strategy so again it's actually about finding your why first you find your why and then it happens to be that speaking is one of the mediums through which you can transmit it and because that was my standard I never got bothered by the size of my audience.

1:12:25So for example, I remember in the early days, people would say, we promised you an audience of 100 people, and I'd show up to the event and they had 26. And they were like, I'm so sorry, I'm so sorry. And I'd be like, no, no, don't worry about it. That's 74 people that are going to miss out. And I would give 100 % of my energy to those 26 people. Because I wasn't there for the numbers, I was there for the message and whoever wanted to show up. I never cared if people were on their phones while I was speaking. because if I'm that boring, then yeah, you should play Wordle. Because my job, if I'm good at my job, my job is to hold your attention.

1:13:04That is my job, to give you something that makes you want to put your phone down and be like, this is interesting. That's my job. So if I'm bad at my job, yeah, you should go do something. And I don't know what you're typing on your phone. Maybe you're tweeting, this is amazing. Maybe you're helping me spread my message. I said something in soundbite form that you're putting on all your social because you want to spread it. Maybe you're taking notes. I don't know. I heard so many speakers, they would stand up and go, ladies and gentlemen, can you just put your phones away for an hour, show me some courtesy while I speak?

1:13:34I'm like, no, no, no, no, that's not how it works. So number one is intention. You have to show up with something you believe in desperately and you believe that it's really important for this message to be spread and you are going to learn the facility of public speaking so that other people can fall in love with this idea as much as you have fallen in love with it. That is the reason to perfect the skill set. I want you to see how beautiful this thing is like I see how beautiful this thing is. I never show up to take. I always show up to give. And you can always tell the difference in public speakers.

1:14:05So I will literally, before I go out on stage, I will mutter under my breath out loud to myself, you're here to give. Every time, you're here to give. Because it changes my mindset for I'm up there. Because when you're here to give, you'll answer every question you'll show up with full energy it doesn't matter if they like you or not I'm here to give when you're here to take you can always tell you care too much if you get a standing ovation you expect something back when people ask you questions you give answers like well you can find that in my new book or the slide behind you has all your socials because you showed up for followers.

1:14:47You showed up for business. You showed up to take, you showed up to get, as opposed to showing up to give. You start by telling people your credentials. That's my favorite one. Whenever I speak, people always make fun of me because there's no... I stand in the middle of the stage, I give it a beat, and I just start. Here's a story, bang. I don't be like, thanks for having me this is an honor, I'd like to thank the host there's no preamble I've written all these books and I've done all these TED talks I don't tell you anything about me because it's not about me it never was about me I'm just a vessel for a message that's all I am I can tell you all the tricks that I've learned that can make somebody a better public speaker and I got the question a lot so we actually made a whole presentations course about it that literally goes through all the tricks and tactics.

1:15:43But the thing that I want to instill in people, which is speaking, is simply a strategy to spread a message. And there are many strategies to spread a message. You can make a film, you can write a book, you can have a social media presence, you can find partnerships, you can build a business. There's millions of ways to do it. It's just one avenue. But first and foremost, you have to have a thing that compels you. And the reason is because you're going to get kicked on your ass a lot. And so unless you have compulsion, you'll give up. Another thing I noticed when we were at the last conference together, your name badge said your name.

1:16:20And then your job, everyone else had like their title. So mine was whatever the hell my title was at the time. Optimist. Have you always been an optimist throughout your life? Or is this something you've learned to cultivate? I mean, the answer is both, right? It's like somebody has some sort of facility and then they practice and they work really hard and they get really really good at it. Like you're pretty good at basketball. And if you work really hard, you can get in the NBA. Right. So yeah, my whole life, people called me happy go lucky. Right. That's what the term was when I was a kid. And then, you know, you sort of work on it.

1:16:51You're like, okay, this seems to be an advantage. This seems to be something that will help me excel in whatever I'm trying to do. And I want to be defined by who I am, not what I do. Because, you know, I see this, you see this very often in successful people, right? Which is they spent their whole life being picket profession an attorney you know since the age of 21 maybe 23 right they're in it they're an attorney right um and they do it for 20 years and 30 years and they want to retire and then the first thing that happens is they have an identity crisis if i'm not an attorney what am i you know or somebody who gets fired after a job for 20 years they don't know what to do ceos who thought their value was that they were ceo they're no longer the ceo it's because what they did was they confused what they did.

1:17:34Or like, look at someone's bio, right? That's, I think, the best place to look. Look at someone's bio. It says CEO of or Oscar-nominated actor of. So you're defining your entire self-worth based on a position you have or something that you accomplished in the past. That, by the way, every year is further and further away, right? When did you win your Oscar? 25 years ago, you know? That's your identity. And that's the problem. and I never wanted my bio to start with something I do, a title I have, or something that I achieved in the past that who even cares, right? I wanted to be defined by who I am.

1:18:10So if you look at my name, whenever I blurb a book, it'll always say optimist and bestselling author of dot, dot, dot. Right? And no matter what I do, I'll always be that. And no matter what job I have and if I eventually retire, I'll always be that. So yeah, that is by design. I want my title to be who I am, not what I do. So let's say we win the infinite game as a civilization. You can't win the infinite game. You can just stay in the game. Sure. So I would argue that winning the infinite game of civilization is that we survive infinitely and we survive longer than we think. I had the great honor of getting to spend a little time with Dr.

1:18:53James Kars before he died. and uh he was first of all a magical magical guy and truly embodied an infinite mindset and um when i had told him that i'm writing a whole new book to build upon the foundation that he that he built that he's that he wrote he was overjoyed because he recognized that his kooky little philosophy book that he wrote was going to have a longer life because i was going to pick it up and carry it on. So I'm really honored by that, you know, that I feel like I'm carrying his torch and I'm really proud to carry his torch. So when we met for the first time, I think the first question I asked, just when we sat down, I'm like, I have to ask you, how'd you come up with it?

1:19:39How did you come up with the concept of the infinite game? Because, you know, there are many people who espouse theories, but you put out a truth, an unassailable truth and those don't happen very often I mean Galileo had one of those Newton had one of those you've got one of those like the number of people who that other people use your truth to explain the world how the hell did you come up with it and he said in the 1970s they were game theory was all the rage and everybody was talking about game theory and they would have these salons where they would bring sort of these mixed groups of like an economist, you know, a theologian, a mathematician, you know, whatever, a philosopher.

1:20:28They'd have these salons and they would obsessively discuss game theory. And the Prisoner's Dilemma is one of the theories that emerged from one of these salons. Came out in the 1970s, right? And Dr. Kars, a theologian, was invited to these salons. and he realized after attending them that they were all talking about winning and losing like everybody when they discussed game theory they only discussed winning and losing and he raised his hand and said but what about playing you're only talking about the outcome what about the play and that was stuck in his head and he was at home and he realized something which is when his kids were playing ping pong for example, when his kids were playing a finite game, invariably there was screaming and shouting at some point.

1:21:20There was one player accusing the other player of cheating. It didn't always end well. But when the kids were doing something infinite, like they were playing with Lego, they were drawing, he said it was quiet all day. One kid would join, one kid would leave, and the players would come and go. And he realized that we are so obsessed with winning that we sometimes forget about playing. And not all playing wins. So you can play ping pong or you can play Lego. And then you start to pull back and you realize so much of our world is actually more like Lego than it is about ping pong. So business, you play at business.

1:22:05You can't win at business. And so employees come and go. But the company, the game continues. And this was the problem with the obsession with game theory, even today. Almost all the discussion about game theory is, how can I win? Or how can I get an advantage over you? And not enough discussion is about the joy and art of the play and playing. And that's what I love about it. And I have tried to build my business and live my life in his vision, which is I'm having fun playing my life and I'm having fun playing in business, but I'm not trying to win or outdo anyone. Such a beautiful story. Isn't that gorgeous?

1:22:50Yeah. So win-win. I wish he was still alive. I know. He and I had a conversation during COVID and I didn't know what, I just decided to just call him. I'm like, can we just have a conversation and just record it? He's like, yeah, sure. And so we recorded it. It was just a freewheeling conversation and after he died we cut it up and released it as an episode of my podcast so you can hear him and his words and he laughs the whole time he's just the best I'll link to it after this thank you so much thanks for having me this is amazing

1:23:28there we go thank you so much for watching everybody and huge thanks to Simon for speaking with me do go check out his stuff lots of links below to his books. I highly recommend you read The Infinite Game. It's so good. Also linked to a bunch of the other resources we touch on. If you enjoyed this, please like, please share. You can now splice it up on YouTube and make your own little shorts out of it. Just, you know, spread the word. That's all for now. I'm very sweaty. My air conditioning's not working. So excuse the listen. I will catch you all next time.

1:24:05Thank you.

1:24:35Thank you.